First gold bar from CIP circuit. Source: Silver Lake Resources
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  • Silver Lake Resources (SLR) progresses its acquisition of TSX-listed gold miner Harte Gold, which owns and operates the Sugar Zone mine in Ontario, Canada
  • The company has entered into a subscription agreement to purchase Harte Gold, as well as an arrangement to provide a debtor-in-possession loan (DIP loan)
  • The subscription agreement gives Silver Lake a path to acquire Harte Gold subject to applicable closing conditions, such as Court approval
  • If Silver Lake is successful, it will become the sole stakeholder of Harte Gold in a deal that ensures the company’s business and activities continue as a going concern
  • Shares in SLR last traded at $1.59 on December 7

Silver Lake Resources (SLR) has progressed its acquisition of TSX-listed gold miner Harte Gold, which owns and operates the Sugar Zone mine in Ontario, Canada.

The company has entered into a subscription agreement to purchase Harte Gold, as well as an arrangement to provide a debtor-in-possession loan (DIP loan) in an action under the Companies’ Creditors Arrangement Act (CCAA)

The subscription agreement and DIP Loan follow the acquisition of BNP Paribas’ credit facilities by a Silver Lake subsidiary on November 19, 2021.

Silver Lake plans to acquire Harte Gold for roughly US$74.1 million (A$104 million) in credit bid consideration reflecting the value owed to Silver Lake under the facilities and the full amount of the DIP loan, alongside an estimated US$3 million (A$4.2 million) cash consideration.

Also comprising the deal is the applicable assumes liabilities which will be retained by Harte Gold alongside the satisfaction of finance facility obligations owed by Harte Gold to Appian Capital Advisory by the way of Siler Lake shares, estimated to be no more than US$28 million (A$39.3 million).

The subscription agreement gives Silver Lake a path to acquire Harte Gold subject to applicable closing conditions, such as Court approval and the completion of a sale and investment solicitation process within CCAA proceedings.

If Silver Lake is successful, it will become the sole stakeholder of Harte Gold in a deal that ensures the company’s business and activities continue as a going concern.

On December 7, 2021, the Ontario Superior Court of Justice approved Harte Gold’s motion for an initial order under the CCAA.

The initial order, among other things, authorised the appointment of FTI Consulting Canada as Harte Gold’s monitor and permitted an initial advance of C$400,000 (A$444,185) under the DIP Loan.

Harte Gold plans to seek an updated and restated initial order at a second court hearing within 10 days in order to approve the subscription agreement and raise the amount that can be borrowed under the DIP Loan to C$10.8 million (A$12 million), subject to relevant terms and restrictions.

Silver Lake will acquire Harte Gold upon Court approval of the subscription agreement, subject to its terms and the fulfilment of applicable conditions.

If Silver Lake is successful in purchasing Harte Gold via the proposed subscription agreement and accompanying sale and investment solicitation process and CCAA processes, the transaction is scheduled to close in late January 2022.

Shares in SLR last traded at $1.59 on December 7.

SLR by the numbers
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